Microsoft Slashes at Google Apps Price Point with Rapier of Granularity

Microsoft officials position the granular pricing in Microsoft Online Services as superior to Google's one-size-fits-all subscription fee for GAPE messaging and collaboration enterprise applications. GAPE is easily less expensive than Microsoft's offerings of Exchange Online and SharePoint Online, yet Microsoft's ability to let customers pick and choose apps with the familiar Exchange and SharePoint user interfaces may be appealing to customers new to cloud computing.

At the time, this seemed a profound departure from the CAL
(Client Access Licence)- and SA (Software Assurance)-laden model of Microsoft's on-premises applications. Experts rushed to
proclaim Google a challenger to the Microsoft productivity and collaboration
software empire.

Fast-forward 18 months. Microsoft, displaying a genius for one-upmanship, is arguing
that Google's blanket cost for GAPE is not satisfactory given what customers
really want: more choice in pricing.

Such was one of the points Chris Capossela, senior vice president for
Microsoft's Information Worker division, made in differentiating the value of
Microsoft Exchange Online and SharePoint Online from Google Apps for eWEEK
yesterday.

Microsoft Nov. 17 broadly launched Exchange Online and SharePoint Online, the company's
challenge to the popular Google Apps suite. The Microsoft suites cost $2 to $15
per user, per month, depending on what each user requires to satisfactorily
perform his or her job. Capossela's pitch is:

Pricing is a great reason to consider
Microsoft. We don't think the one-size-fits-all approach [of Google and other
software-as-a-service providers] is what people want. We are offering a variety
of capabilities at different price points because there are lots of different
types of information workers. We know better that anybody else, there is a
variety of ways people work. We want to give them choice.

That's the theory, anyway. In practice, Capossela said a
"deskless" worker who needs only to access Outlook e-mail from
Exchange will pay $2 per month, while a worker who needs to access Exchange
Online, SharePoint Online capabilities and the Office

LiveMeeting Web
conferencing application will cost a business $15 per month.
Capossela's point is that a CIO could find
Microsoft's SAAS productivity and collaboration applications more attractive
than Google's because the solutions are offered as pick-and-choose options.

Josh Greenbaum of Enterprise Applications Consulting said this differentiation
is smart because, "Google is a little ahead of them in the market and they
clearly have to drive home a message about value relative to what Google is
doing." Greenbaum also said Microsoft's granular pricing will help the
SAAS model evolve.

Want to subscribe to Exchange a la carte? Go for it. Microsoft's argument is
that GAPE customers get Google's Gmail, Calendar, Docs, Sites, Video and other
features whether they want them or not. They don't get to select only the
applications they need, which is Microsoft's value proposition despite the
higher costs for its SAAS.